Bean Option Recap From Jon Karmin 03/23/15

Beans again traded higher as the crowded long dollar trade and its recent weakness is flushing out the weaker shorts in grains.  I feel it is a bit absurd considering the underlying bearish fundamentals particularly in beans but dollar weakness has been enough to rally us off lows.  I have been out of the market the past couple of weeks as the risk in the market did not justify holding inventory but I feel we are approaching levels in price and vol that may warrant putting the toe back in the water.  A couple of weeks ago I mentioned in comments that 18.5% was worth covering shorts in SK as we usually firm into planting intentions and although vol may not go up it probably wouldn’t go down much.  I did not capture the resulting 3% pop in SK vol (although fortunate not to be short) but now think it may make sense to initiate trades using vol to capture an eventual move lower.  I’m looking at $10 in SK as an entry point and possibly 10 to 20 cents higher if we touch off stops above that resistance level.

Bean vols:

April vol 18 ¼ down 1 ¾

May vol 20 ¾ unchanged

June vol 20 ¾ unchanged

July vol 21 ½ unchanged

Nov vol 21 ¼ down a ¼

Bean straddles:

April 990 str 16 ½-17 ½

May 990 str 49-49 ¾

June 990 str 65-66

July 1000 str 86-87

Nov 960 str 124-125 ½

Bean players:

Rosenthal Bot 200 April 980 Puts 7.25-7.5

Rosenthal Bot 250 April 970/960 Put spds 1.75 db

JP Morgan Sold 250 Nov 1080 Calls 25

Marex Sold 250 Aug 1000 Calls/ Bot 500 Aug 1100 Calls 12.5-12.75 credit

Rand Sold 250 Jul 880 Puts 7.25

DRAX Bot 1500 May 970 Puts 17.25-17.5/ Bot 570 may futures 986

JP Morgan Bot 400 Nov 900 Puts/ Sold 400 Nov 1100 Calls 11.5-12.5 db

DRAX Bot 300 week 1 980 Puts/ Sold 600 week 1 960 Puts even

Rosenthal Bot 500 April 990/980 Put spds 5.75 db

RJO Sold 200 April 980 Straddles 18

Macquarie Bot 200 May 960/900 Put spds 10.875/ Bot 52 May futures 988

TJM Sold 250 April 980 Calls 13-13.25

Rand Bot 200 April 960 puts 1

Rosenthal Sold 200 April 990/1000 Call spds 3.5 credit

RJO Sold 500 May 920 Puts 4.125/ Sold 48 May futures 987

FI Bot 250 April 980 Calls 11.4-12.75

RJO Bot 500 SDFK 930/900 Put spds 5 db/ Bot 70 Nov futures 967

Jon Karmin (JSK)/Jeff Pogonitz (POG) Brokerage

Data source: Jon Karmin and Jeff Pogonitz bean option brokers